Deadlines Nearing for ARC/PLC & CRP

February 5, 2020

Deadlines are approaching to sign up for two important federal programs: ARC/PLC and CRP.

Monday, March 16 is the final day that farmers can enroll at their local Farm Service Agency office in either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC). ARC provides “shallow loss” protection and covers losses below 86% of the area (county) benchmark revenue.

PLC is a price protection program, with payment made on 85% of base acres. The marketing year average price is considered the effective price. Payment is made when the effective price is less than the effective reference price. The reference price is $3.70 per bushel for corn, $8.40 for soybeans and $5.50 for wheat.

Farm Credit Services of America (FCSA) is available to help farmers make their decisions.

“This is another example of why it is critical for producers to work with experts who have tools and the knowledge to help navigate these major operational decisions,” says Tony Jesina, senior vice president of related services for FCSA. “There are resources out there for producers to try to plug and play with this information, but due to the complexities, it would be better for them to be working with trained professionals who can assist them.”

As of mid-January, South Dakota farmers had received more than $192 million in indemnity payments for the 2019 growing season, says Tyler Leighton, regional vice president of related services for Southeast South Dakota.

“Across our territory, indemnity payments for 2019 were nearly double that of 2018,” he says. “This underscores the need to understand how your crop insurance will protect you against the risk inherent to ag.”

Leighton says farmers need to simultaneously make a decision about crop insurance and the FSA ARC/PLC program.

“We (FCSA) have a suite of new tools to help producers assess and understand their operations’ crop insurance needs and to help them look at the ARC/PLC decision. This includes Optimum, a tool that is unique to FCSA and relies on data unique to each operation to analyze all possible permutations and combinations of policy choices to show anticipated outcomes,” Leighton says. “It is a new approach to help producers make their risk management decisions.”

A farmer can take advantage of the Optimum tool by visiting with a local FCSA agent.

Enroll in CRP this month

The deadline to sign up for the Conservation Reserve Program(CRP) is February. 28. This is for farmers and private landowners who are either enrolling for the first time or re-enrolling for another 10- to 15-year term.

CRP has 22 million acres enrolled, but the 2018 Farm Bill lifted the cap to 27 million acres. Signed into law in 1985, CRP’s original intent was primarily to control soil erosion and help stabilize commodity prices by taking marginal lands out of production. It has evolved over the years to provide many conservation and economic benefits.

Farm Service Agency Administrator Richard Fordyce says this is the first opportunity for general signup since 2016.

“It is crucial they (farmers and landowners) make their final determinations and submit offers very soon to take advantage of this popular conservation program,” Fordyce says.

Those who enroll in CRP receive yearly rental payments for voluntarily establishing long-term, resource-conserving plant specials, such as approved grasses or trees, which can control soil erosion, improve water quality and develop wildlife habitat on marginally productive agricultural lands.

To enroll in CRP, contact your local FSA county office or visit fsa.usda.gov/crp.

The CRP continuous signup is ongoing, which enables producers to enroll for certain practices. FSA plans to open the Soil Health and Income Protection Program, a CRP pilot program, in early 2020, and the 2020 CRP Grasslands signup will run from March 16 to May 15.

Nobody can predict what the 2020 growing season will bring in regard to weather and prices, but now is the time for farmers to access the tools that are available to help them make the best decisions.